* Porter seen announcing CSeries order Wednesday
* Operating jets from Porter's Toronto base poses problems
* Porter order could create third cross-Canada carrier
* Order would make Porter first Canadian CSeries buyer
By Susan Taylor
TORONTO, April 9 Canadian regional carrier
Porter Airlines is expected to announce an order for 12 of
Bombardier Inc's new CSeries jets on Wednesday, a
likely challenge to flight restrictions at its Toronto Island
The privately held airline, which says it will announce
"expansion plans" at a morning press conference, could create a
third cross-country carrier with the deal, ratcheting up
competition for Canada's No. 1 and No. 2 airlines, Air Canada
and WestJet Airlines Ltd.
Buying CSeries jets would give Porter the opportunity for
longer flights and extra routes. But it raises questions about
its ability to operate the CSeries from Billy Bishop Toronto
City Airport, a short ferry ride from the city's core.
Under an agreement between the city of Toronto, the federal
government and the Toronto Harbour Commission, almost no
jet-powered aircraft, which would include the CSeries, may use
the Island Airport. ()
Porter Airlines did not respond to requests for comment on a
CSeries order, which The Wall Street Journal reported on
Tuesday, citing unnamed sources. Bombardier spokesman Marc
Duchesne said the Montreal-based company would not comment on
But a long-term Porter employee said a mockup of the jet was
being assembled in a Porter hangar, and a CSeries announcement
was highly likely.
Bombardier in December announced a letter of intent with an
"unidentified customer" for 12 CSeries worth $870 million at
list prices, with options for another 18 aircraft that would
swell the deal value to $2.08 billion.
"It will double the size of the company, peoplewise, and
just opens up the continental North American markets," the
Porter source, who was not authorized to speak to the media and
who asked not to be named, said of the order.
Plane delivery is unlikely before 2017, the source added.
Privately held Porter turned a small profit in fiscal 2012,
triggering profit sharing, the source said.
There is speculation that Porter may lobby to have the
airport's rules changed, arguing that the "noise footprint" from
the CSeries is not dissimilar to that of the 70-seat Q400
turboprop planes it currently flies.
Bombardier and engine manufacturer Pratt & Whitney promise a
"low noise footprint and just 70 decibels approaching the
airport," wrote Scott Hamilton, an aviation analyst with Leeham
Co, noting that the airport is "highly noise sensitive."
Seven-year-old Porter currently flies a fleet of 26 Q400
propeller planes to more than a dozen cities in eastern Canada
and the United States, with routes restricted by the plane's
range of approximately 1,000 miles.
The CS100 has a range of some 3,066 miles, but that distance
can be sharply reduced by runway length.
"We suspect that any move to open up the (island airport) to
jets will be met with fierce opposition, so there is no
guarantee that the airline will be allowed to operate the CS100
from its main hub," said National Bank Financial analyst Cameron
Doerksen in a note.
If Porter plans to fly the CSeries from another airport that
does not connect to its Toronto Island base, its advantages over
Air Canada and WestJet would be "limited at best," he added.
"Indeed, the history of airlines in Canada attempting to
grow from regional players into national players is not
positive," he wrote.
Porter Chief Executive Robert Deluce has hinted in the past
that his airline could expand into Western Canada, a strategy
that would invite a tough competitive response from Air Canada
and WestJet, Doerksen wrote.
The island airport's runways could pose a further problem.
While the longest runway is approximately 4,000 feet, matching
the CSeries requirement for takeoff, the jet requires 4,400 feet
for landing, Bombardier said.
That means the airport would require a "significant rework"
for the planes to operate, RBC Capital Markets analyst Walter
Spracklin said in a note.
"Porter could also be looking to deploy the CSeries from
alternate airports, including Montreal, to destinations in the
U.S. and significantly expand its footprint on those routes," he
Bombardier, the world's fourth-largest plane maker, delayed
the first flight of its CSeries by six months to the end of June
after unspecified supplier delays.
Five years in development, the $3.4 billion jet is scheduled
to enter service in mid-2014, and Bombardier wants 300 firm
orders by then. It had 148 firm orders as of Dec. 31.
A Porter order would make the airline the first Canadian
CSeries customer. Seven companies have firm CSeries orders, not
including a Russian deal for 32 CS300 jets that requires
Shares of Bombardier gained 2 percent to close at C$4.08 on
the Toronto Stock Exchange on Tuesday.